ALKEME understands insurance is a significant expense for individuals and families, so we wanted to update you on the state of personal insurance premiums in 2023. That way, you’re informed as your personal policies come up for renewal.
Unfortunately, rates rose in 2022 almost across the board, driven by inflation and weather-related issues, and that is expected to continue for many personal lines renewing this year. The good news is that your ALKEME agent can help find find the best rates available to you and your family.
With that noted, here is a breakdown of the increases by coverage and what you can expect to see this year.
Auto Insurance: Up 9% in 2022, Further Rise Expected in 2023
Auto insurance premiums continued their upward trajectory in 2022 due to inflation and traffic accident rates. Unfortunately, increases will likely continue throughout 2023. Auto owners in some states are already seeing increases of almost as high as 17%.
Homeowners Insurance: Up 7% in 2022, Set to Increase 9% in 2023
Homes at risk of wildfires and wind- or water-related disasters will continue to experience rate increases as the industry recovers from natural disasters like Hurricane Ian, where damage estimates reached as high as $65 billion. In 2023, homeowners should prepare for a 9% increase in premiums.
Homeowners may also want to increase their replacement cost value in 2023 to offset increased construction costs and inflation. Note that increasing your replacement cost will slightly increase your annual premiums, but the added coverage is well worth the cost.
Renters Insurance: No Change in 2022
Renters insurance covers only personal belongings and liability in case of an unexpected event, not the building itself, which makes it significantly cheaper than homeowners insurance.
That said, everyone who rents should have renters insurance (including college students). At an average of $32 a month or $382 a year in 2023, renters insurance is a strategic and affordable way to minimize risk and loss.
Health Insurance: Up 3.5% in 2023
Inflation didn’t significantly impact employer-sponsored health insurance premiums in 2022, due in part to policy costs being set months earlier before inflation became a real factor.
However, in 2023, people buying insurance for themselves will pay 3.5% more than they did in 2022, while employers will pay roughly 6.5% more.
Umbrella Insurance: No change in 2022, 2023
A personal umbrella policy is a good idea if your auto and homeowner’s policies don’t fully cover your net worth, or you live a somewhat “high-risk” lifestyle with a dog (and neighbors), a trampoline, a backyard swimming pool, or a motorcycle.
Umbrella insurance costs between $150 and $300 annually for an extra $1 million in coverage. So if you fall into one of the above-mentioned categories, an umbrella policy might be a good idea for you.
Life Insurance: Down 0.5% in 2022, Remains Affordable in 2023
If there’s a silver lining in the insurance industry when it comes to premiums, it’s with life insurance. Life insurance rates remained steady for a fifth straight month in December 2022, according to the Policygenius Life Insurance Price Index, putting rates slightly cheaper (0.5%) at the end of 2022 than they were at the same time in 2021. Though rates did increase by about 1% month-over-month in February 2023, life insurance remains relatively affordable.
That said, if you’re young and healthy, now is a great time to look into life insurance and shop around to get the best rates.
While no one knows for sure what the year holds, ALKEME is always here to help you find the best coverage for your needs and budget.
If you have any questions or would like a complimentary review of your policies, please don’t hesitate to reach out to your ALKEME agent!
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